New Jersey State Senator Kevin O’Toole issued this statement after reading reports that the New Jersey Sports & Exposition Authority is “effectively operating at a deficit” and that the long-delayed Xanadu project will not open until at least next year.
“The Sports & Exposition Authority, once a source of pride and generator of revenue for the state of New Jersey, now sounds as if it’s overleveraged, losing money and at risk of bankruptcy,” Senator O’Toole said. “One can’t help but wonder how much of this fiscal crisis is due to eight years of shameless political wheeling and dealing over bungled arena, stadium and Meadowlands development projects.
“Governor Corzine has asked the public to trust him as he poured ever-more public money into projects to prop up the teetering Xanadu development,” Senator O’Toole said. “Yet he has never provided all the details about the significant conflicts of interest that he and his adviser, Gary Rose, have had involving Xanadu’s developers and Wall Street investment bank Goldman Sachs, where Corzine was once the chairman and chief executive.
“Just last year, when Xanadu was scheduled to open, the governor toured Xanadu, said he was impressed and liked ‘the revenue projections’ for the 4.8 million square-foot retail and entertainment project. The governor should say if he still likes the revenue projections now that Xanadu’s opening has been delayed again until at least next year.”
According to published accounts, Goldman, the Manhattan-based investment bank where both Rose and Corzine were partners, loaned Xanadu developer Mills Corp. more than $1.1 billion. Investors feared the money could be lost as an accounting scandal sent Mills veering near bankruptcy in 2006. At Corzines behest, Rose engineered a Xanadu bailout that included Dune Real Estate, a hedge fund. Rose owned an equity interest in Dune. Corzine later also disclosed that he had close ties to Daniel Neidich, Dune’s CEO and a former Goldman partner.